Consumer Protection Act, 1986:

ss. 2(1)(g) and 14(1)(d) - Deficiency in service - Complaint - Maintainability of - Contract of insurance - Consignment of goods - Damaged in transit - Compensation paid by insurer to consignor/assured - Execution of letter of subrogation-cum-special power of attorney by consignor in favour of insurer - Claim of compensation by consignor and insurer against carrier - Allowed by fora below - On appeal, held: Insurer, as subrogee, can file a complaint under the Act either in the name of assured (as his attorney holder) or in joint names of assured and insurer for recovery of amount due from the service provider - It can request the assured to sue the wrong doer - Insurer cannot in its own name maintain a complaint, even if it's right is traced to the terms of a Letter of Subrogation-cum-Assignment - On addition of words of assignment to Jetter of subrogation, the complaint would be maintainable so long as it is in the name of asured and insurer figures in the complaint only as attorney holder or subrogee of assured - Document whether subrogation simpliciter or subrogation-cum-assignment is not relevant for deciding the maintainability of a complaint - On facts, presumption regarding negligence u/s. 9 was not rebutted - Loss of consignment by assured and settlement of claim by insurer established by evidence - Thus, order of fora below not interfered with - Carriers Act, 1865 - s. 9.

Insurance - Difference between 'subrogation' and 'assignment' - Held: Equitable assignment of rights and remedies of assured in favour of insurer, implied in a contract of indemnity, is known as 'subrogation' - It occurs automatically, when insurer settles the claim under the policy, by reimbursing the entire loss suffered by assured - It need not be evidenced by any writing - Assignment refers to transfer of a right by instrument for consideration - When there is absolute assignment, assignor is left with no title or interest in the property or right, which is the subject matter of assignment.

Subrogation - Principles of - Explained.

Subrogation - Three categories - Subrogation by equitable assignment; subrogation by contract; and subrogation-cum-assignment - Explained.

Insurance contract - Settlement of claim - Execution of document by assured in favour of insurer, deed of Subrogation simpliciter or Subrogation-cum-Assignment - Held: Depends upon the intention of parties as evidenced by the wording of document - Title or caption of document, by itself, may not be conclusive - If intention was to have only a subrogation, use of words "assign, transfer and abandon in favour of" would in the context be construed as referring to subrogation only.

Reconsideration of the decision in *Oberoi Forwarding Agency v. New India Assurance Co. Ltd. - Held: Oberoi's case is not good law insofar as it construes a Letter of Subrogation-cum-Assignment, as a pure and simple assignment - But to the extent it holds that an insurer alone cannot file a complaint under the Act, the decision was correct.

s. 2(d) (as amended by Amendment Act 62 of 2002) - Addition of words 'but does not include a person who avails of such services for any commercial purpose' in the definition of 'consumer' - Applicability of amendment to complaint filed before the amendment - Held: Not applicable.

Transfer of Property Act, 1882:

s. 6 - Letter of subrogation containing terms of assignment - Held: Cannot be treated only as an assignment by ignoring the subrogation, otherwise document itself becomes invalid and unenforceable, having regard to the bar contained in s. 6 - But when letter of subrogation-cum-assignment is executed, assignment is interlinked with subrogation, and not being an assignment of a mere right to sue, will be valid and enforceable.

Words and Phrases:

'Subrogation and 'Assignment' - Meaning of.

The first respondent-assured/consignor entrusted consignment of goods for transportation to the appellant carrier. The said consignment was insured with the second respondent-insurer covering the transit risk. The goods were damaged in an accident. The insurer settled the claim of the assured. On receiving the payment, the first respondent executed a Letter of Subrogation-cum-special Power of Attorney in favour of the second respondent. Respondent no. 1 and 2 filed complaint before the District Consumer Forum claiming compensation. The District Forum allowed the complaint and the same was upheld by the Fora below. Hence the present appeal.

The present appeal was referred to a larger bench for reconsideration of the decision in *Oberoi Forwarding Agency v. New India Assurance Co. Ltd. case, which in turn referred the matter to the present Constitution Bench.

The questions which arose for consideration are:

(a) Where the letter of subrogation executed by an assured in favour of the insurer contains, in addition to words referring to subrogation, terms which may amount to an assignment, whether the document ceases to be a subrogation and becomes an assignment?

(b) Where the insurer pays the amount of loss to the assured, whether the insurer as subrogee, can lodge a complaint under the Act, either in the name of the assured, or in the joint names of the insurer and assured as co-complainants?

(c) Where the rights of the assured in regard to the claim against the carrier/service provider are assigned in favour of the insurer under a letter of subrogation-cum-assignment, whether the insurer as the assignee can file a complaint either in its own name, or in the name of the assured, or by joining the assured as a co-complainant?

(d) Whether relief could be granted in a complaint against the carrier/service provider, in the absence of any proof of negligence?

(e) and whether the decision in Oberoi's case is a good law?